At the 51st annual general meeting of the Asian Development Bank (ADB) in Manila last week, discussions centred on the advancement of new technologies and the impact robotics and AI would have on local jobs.
In an interview on the sidelines of the event, Sameer Khatiwada, ADB economist at Economic Research and Regional Co-operation Department, told The Myanmar Times that while some jobs will likely be replaced by machines, new functions are also emerging that will require human skills.
Here are some excerpts of the interview, edited for clarity, which includes suggestions by Mr Khatiwada on how best to prepare for the upcoming disruptions:
Are technologies affecting jobs? How and where?
Yes and they are meant to do just that. Technologies will have an impact on labour markets across the region, but to varying degrees. However, it is important to note that new technologies will drive higher productivity, the foundation for better-paid jobs and economic growth.
We are optimistic as new technologies often automate only some tasks of a job, not the whole job. Meanwhile, rising demand offsets job displacement driven by automation while technological change and economic growth create new occupations and industries.
As such, the region should embrace new technology as it is the main driver of productivity and economic growth.
How will the garment industry, which is a big part of the Myanmar economy, be affected?
Garment manufacturing has long been a path out of poverty for low-income economies in developing Asia because it provides steady employment for a workforce with few skills.
In Bangladesh, Cambodia and India, automation has moved quickly over the past decade, but the main driver differs in each case. Three formerly manual-intensive processes— cutting, spreading, and ironing—are now done more accurately, twice as quickly, and with one-tenth of the workers. A Jacquard weaving machine increases daily output per worker sixfold.
Automation reduced labour costs per garment but, more importantly, reduced delivery time for greater flexibility, encouraging factory expansion for exploiting economies of scale.
In these three economies, labour accounts for only 10 percent–20pc of basic garment variable cost. As a result, costs are only marginally affected by wage increases on the one hand and reductions in unit labour cost on the other.
Instead, savings from automation derive more from reduced waste and higher volume—and therefore better return on fixed costs. Still, profit margins in recent years have been squeezed by intense competition as suppliers chase sluggish demand growth in consumer markets.
It is difficult to predict how long before full automation occurs. Sewing is a very labour-intensive process. Technological advances in sewing machines have improved accuracy but have not yet replaced jobs.
Most executives of large garment exporters say replacing operators with sewing robots is unlikely in the next decade because it is barely feasible, either technically or economically, and the industry would need to adapt.
How should workers view concerns about job disruption?
Despite our optimism regarding Asia and Pacific’s prospects, we point out that new technologies will alter the skills required of the workforce and may cause unemployment as some firms downsize or close.
They make the less-skilled more likely to experience lower wage growth, exacerbating income inequality. Governments should respond to these challenges by ensuring that workers are protected from the downside of new technologies and able to harness the new opportunities they provide.
This will require coordinated action on skills development, labour regulation, social protection, and income redistribution.